DENVER | Main Development Thread #7 - Page 338

Ich · #**6741** Posted **Sep 11, 2019, 4:43 AM**

Quote:

Originally Posted by TakeFive

Pretty sure that on the east side of I-25 (north of Belleview) the zoning was the same as the downtown core or B-8. Chances are it's the same over there.

Sign of the Times

Enjoy newly reduced pricing + 6 weeks of rent-free living + waived fees!

Courtesy Mill Creek Res/Modera Cap Hill

That’s a bad example to prove your point. I looked at that place and the rent they were originally asking for was comparable to what they are asking in Union Station/ Riverfront but not as nice area. Last I heard at my place, Alexan 20th Street Station, has leased 40% of available units (upper floors are still being finished) which isn’t bad considering it’s only been open for a little under two months.

TakeFive · #**6742** Posted **Sep 11, 2019, 5:55 AM**

Oh Oh

Quote:

Originally Posted by Ich

That’s a bad example to prove your point. I looked at that place and the rent they were originally asking for was comparable to what they are asking in Union Station/ Riverfront but not as nice area. Last I heard at my place, Alexan 20th Street Station, has leased 40% of available units (upper floors are still being finished) which isn’t bad considering it’s only been open for a little under two months.

Source

Actually my primary point went to a pipeline of projects that won't even be completed for another 2 to 3+ years depending on when they actually break ground prior to end of next year. There's a couple of 700-unit projects, 3 towers in AS, a bunch of mid-rise proposals in RiNo and near 38th and Blake, Golden Triangle, units proposed at Evans/I-25, along West Colfax near Sloan's, at Mile High stadium, in Cherry Creek etc.

That was interesting feedback though and I did wonder if maybe Modera Cap Hill started with too high of expectations.

TakeFive · #**6743** Posted **Sep 11, 2019, 6:23 PM**

Applying some common sense to statistics

DBJ has a piece ranking cities by number of apartment units expected to deliver in 2019 based on data from RentCafé. Denver is ranked ahead of Portland, Minneapolis, Tampa, San Francisco, Boston, Charlotte, San Jose and Orlando at No. 12 just behind Chicago.

Obviously, these numbers can bounce around from year to year. In fact, last year Denver delivered 15,187 new units while in 2019 RentCafe is estimating 6,836 new apartment units. What if we averaged both years together? Let's see where 11,000 new units would place Denver this year.

In addition to the above named cities at 11,000 units Denver would also rank higher than Chicago, Houston, D.C., Phoenix, Los Angeles, Atlanta and Austin at No. 5 behind only Miami, NYC, Seattle and Dallas-Fort Worth.

I would also suggest that much of the disparity from 2018 to 2019 is much fewer units being delivered from the suburbs.

twister244 · #**6744** Posted **Sep 11, 2019, 6:33 PM**

I guess the question is, if development fees being collected by the city are down, and it's a trend, why?

Is this part of a macro trend pointing towards a slowdown in the overall economy? Or, is this simply the pace of development in Denver leveling off? In my neighborhood (Jefferson Park), I really haven't seen a noticeable slowdown in new housing construction. There are multiple projects that are either beginning construction, or have just begun, and a few others in various stages of construction. If you compare to a couple years ago, then yeah I could see how the numbers suggest a slowdown, but hard to say what exactly is driving all of it.

CherryCreek · #**6745** Posted **Sep 11, 2019, 7:45 PM**

Quote:

Originally Posted by Ich

That’s a bad example to prove your point. I looked at that place and the rent they were originally asking for was comparable to what they are asking in Union Station/ Riverfront but not as nice area. Last I heard at my place, Alexan 20th Street Station, has leased 40% of available units (upper floors are still being finished) which isn’t bad considering it’s only been open for a little under two months.

Capitol Hill has had a very small share of the growth that has driven the Denver boom over the past 8 years. The original great Denver urban neighborhood has not really boomed during one of the greatest urban booms in the City's history. In part, perhaps it's because of all the "land farmers", owning open parcels in Capitol Hill who are happy to hold onto their parking lots for generations, rather than sell to developers. Looking at the silver lining, the undeveloped parts of Cap Hill remain a "land bank" from which future urban development can draw.

Stonemans_rowJ · #**6746** Posted **Sep 12, 2019, 12:18 AM**

I recently talked to my neighbor who is an "ibuyer" for Redfin. Mostly small talk but I told him that I flip houses and if he has anything that doesn't fit his bill send to me etc etc. Long story short their margin is so tight, so tight, like their target annualized ROI is like 3-5%. Absolutely insane when you think that its a declining market.

For the big big guys, is 5% annualized return acceptable? Probably

Stonemans_rowJ · #**6747** Posted **Sep 12, 2019, 4:22 AM**

Quote:

Originally Posted by CherryCreek

Capitol Hill has had a very small share of the growth that has driven the Denver boom over the past 8 years. The original great Denver urban neighborhood has not really boomed during one of the greatest urban booms in the City's history. In part, perhaps it's because of all the "land farmers", owning open parcels in Capitol Hill who are happy to hold onto their parking lots for generations, rather than sell to developers. Looking at the silver lining, the undeveloped parts of Cap Hill remain a "land bank" from which future urban development can draw.

How many large lot open parcels are there available in Cap Hill for the big national developers? Not too many. If Cap Hill had lots of missing teeth and 17 story height limit might have seen more there.

twister244 · #**6748** Posted **Sep 12, 2019, 3:20 PM**

I can't keep track of all of the RiNo developments anymore....

https://businessden.com/2019/09/12/1...long-brighton/

wong21fr · #**6749** Posted **Sep 12, 2019, 6:04 PM**

Quote:

Originally Posted by twister244

I can't keep track of all of the RiNo developments anymore....

https://businessden.com/2019/09/12/1...long-brighton/

Speaking of RiNo developments, Carmel Partners has broken ground on their development at 3301 Brighton Blvd that's called Carmel Drivetrain. Not too much information on this 400-odd unit development, but I found this rendering:

twister244 · #**6750** Posted **Sep 12, 2019, 6:21 PM**

So that's the resurrected DriveTrain? Actually looks pretty cool from the renderings. City website says "Other" for use, so I am assuming it has ground floor retail? I was at the Woods on Saturday night and noticed equipment on the site, but wasn't entirely sure if something broke ground or not.

wong21fr · #**6751** Posted **Sep 12, 2019, 6:37 PM**

Quote:

Originally Posted by twister244

So that's the resurrected DriveTrain? Actually looks pretty cool from the renderings. City website says "Other" for use, so I am assuming it has ground floor retail? I was at the Woods on Saturday night and noticed equipment on the site, but wasn't entirely sure if something broke ground or not.

Yes for the ground floor retail/commercial space. Looks to be fronting the entirety of Brighton. According to the permit page shoring permits have been issued and foundation permits are under review.

Amazed that this section of Brighton has 1,200 plus units of new housing U/C at the moment.

BG918 · #**6752** Posted **Sep 12, 2019, 7:32 PM**

Quote:

Originally Posted by wong21fr

Speaking of RiNo developments, Carmel Partners has broken ground on their development at 3301 Brighton Blvd that's called Carmel Drivetrain. Not too much information on this 400-odd unit development, but I found this rendering:

I wonder if the City will extend 33rd through from Brighton to Arkins Ct? It looks like a city street on the right side of the building.

Looks like this will cover up the backside (north side) of The Dylan, including the mural:

This will be on the dirt lot on the left:

https://www.bizjournals.com/denver/n...sells-for.html

laniroj · #**6753** Posted **Sep 12, 2019, 7:45 PM**

Quote:

Originally Posted by TakeFive

Applying some common sense to statistics

DBJ has a piece ranking cities by number of apartment units expected to deliver in 2019 based on data from RentCafé. Denver is ranked ahead of Portland, Minneapolis, Tampa, San Francisco, Boston, Charlotte, San Jose and Orlando at No. 12 just behind Chicago.

Obviously, these numbers can bounce around from year to year. In fact, last year Denver delivered 15,187 new units while in 2019 RentCafe is estimating 6,836 new apartment units. What if we averaged both years together? Let's see where 11,000 new units would place Denver this year.

In addition to the above named cities at 11,000 units Denver would also rank higher than Chicago, Houston, D.C., Phoenix, Los Angeles, Atlanta and Austin at No. 5 behind only Miami, NYC, Seattle and Dallas-Fort Worth.

I would also suggest that much of the disparity from 2018 to 2019 is much fewer units being delivered from the suburbs.

Think as you may, I'd be highly skeptical of RentCafe - that website is terribly inaccurate.

In Colorado, SFH permits fell 18.4% YOY May 18'-19' and multifamily permits fell 30.3% during the same timeframe - this all according to CU Leeds Colorado Business Review.

I would add another data point as to the rapidly dwindling development pipeline - more and more fully entitled projects are sitting idle and others being marketed for sale because developers (large and small) can't get the numbers to work. This is mainly a function of costs vs returns vs risk and not so much lack of capital, as was the case in the previous two recessions. There is ample money available, it just doesn't want to pursue a 6% risk adjusted return, it now wants 8% as the risk of recession - or at the very least slowing growth - increases on the daily. Buyers of properties of all types cannot simply cap rate compress their way out of it anymore.

TakeFive · #**6754** Posted **Sep 12, 2019, 8:55 PM**

Quote:

Originally Posted by laniroj

Think as you may, I'd be highly skeptical of RentCafe - that website is terribly inaccurate.

Wasn't thinking; merely making observations.

Quote:

Originally Posted by laniroj

In Colorado, SFH permits fell 18.4% YOY May 18'-19' and multifamily permits fell 30.3% during the same timeframe - this all according to CU Leeds Colorado Business Review.

SFH previously discussed and explained; no need to revisit other than to reiterate the process has been a bit constipated but tons moving towards production.

With respect to multifamily permits I'm not surprised.

Quote:

Originally Posted by laniroj

I would add another data point as to the rapidly dwindling development pipeline - more and more fully entitled projects are sitting idle and others being marketed for sale because developers (large and small) can't get the numbers to work. This is mainly a function of costs vs returns vs risk and not so much lack of capital, as was the case in the previous two recessions. There is ample money available, it just doesn't want to pursue a 6% risk adjusted return, it now wants 8% as the risk of recession - or at the very least slowing growth - increases on the daily. Buyers of properties of all types cannot simply cap rate compress their way out of it anymore.

Interesting info that I wasn't aware of.

I recalling noting when the 10-year T-bill dropped below 2%; it proceeded to drop down a little below 1.5%; in short order it reversed to now over 1.75%. That kind of volatility is unusual. Markets have become 'unsettled.'

I could speculate about a number of things but let's just say that local development is more measured and we'll see what happens.

Robert.hampton · #**6755** Posted **Sep 13, 2019, 7:49 PM**

Quote:

Originally Posted by BG918

I wonder if the City will extend 33rd through from Brighton to Arkins Ct? It looks like a city street on the right side of the building.

Looks like this will cover up the backside (north side) of The Dylan, including the mural

Too bad it won't cover the entire building! The Dylan -- what a stupid name for a truly horrendous building.

Drivetrain look nice though -- would be a great fit for the feel of RINO. Too bad we didn't have more of the builds on Brighton this cycle go for this throwback industrial look and instead opt for cheap EIFS cladding and bright tacky colors.

twister244 · #**6756** Posted **Sep 14, 2019, 5:35 PM**

Did a nice long lunch on my bike yesterday through RiNo and checked out all of the different sites:

Camden Rino:

The apartments at 34th and Walnut:

Not sure what this on back near 35th..... I think offices?......

The HUB Phase II.......

Walnut Street Lofts.....

The WTC site has remained unchanged unfortunately, no news there. I migrated over and up Brighton to check out the new Mission Ballroom area. Demolition of all of the existing buildings is complete now and there is a large amount of wide open dirt lots begging to be developed on. The building to the right (below) I think is offices, with the actual ballroom to the left. I didn't see any actual construction on the swaths of land surrounding the ballroom along Brighton, but this development has huge potential given it's location. For refreshers - https://www.northwynkoop.com/

Moved down along Brighton to the Rev360 project.....

Pretty sure this is the "Vib" hotel site where they had a "ground breaking". Although the site remains undisturbed.

This is the NW corner of 36th and Brighton. According to the city site, this is supposed to be a Red Truck Brewery?

This is the Drive Train site where excavation is underway. If you look deep in the background, you will see a small black crane with some wood framing at the bottom. That's the "Redacted" rental project going up inside Taxi.

Here's the project at 31st and Brighton. Looks like they are just working on converting the existing space right now. Didn't really see any other construction there.